COVID’s Impact on Warehouse Management Outsourcing

COVID’s Impact on Warehouse Management Outsourcing

Q: In today’s market, what are the key benefits of outsourcing warehouse management?

A: The COVID pandemic has companies reassessing their distribution networks. Many are looking for solutions that improve flexibility and capabilities, while still retaining control and transparency. With the right commercial model, outsourcing warehouse management provides those benefits, and more.

Warehouse management companies with nationwide scale and deep industry knowledge offer access to operational expertise and technology due to our core focus on logistics execution.

Mitigation of labor risk is another key benefit, as third-party service providers take ownership of staffing and improve productivity. By leveraging a service provider’s best practices, trained talent, and functional technology, outsourcing can lead to a more flexible and lower total cost distribution network.

Q: How is Capstone’s model different from traditional outsourcing solutions?

A: Capstone’s warehouse management model is a hybrid solution designed to maximize operational performance. We call it “Guest In Your House.” It’s a true partnership with our customers, where they control the real estate and inventory management system, while Capstone focuses on the people and processes.


We offer a menu of execution services, from operating a single function or the entire building, and often co-manage a facility alongside our customer. In every situation, we look to incorporate our pay-for-productivity structure and labor management technology to “variabilize” costs and produce optimal results.

By leveraging the capabilities and resources of both parties, this model provides the expertise and scale of traditional 3PLs; the flexibility of staffing companies; and the culture, transparency, and consistency of an in-house operation.

Q: How does your freight management and last mile capabilities benefit your warehouse management customers?

A: Capstone has more than 600 warehouse operations across the United States and Canada. This scale provides unique insight into local, regional, and national distribution networks and often identifies opportunities to assist our customers with optimization of their broader network.

To address issues such as dwell time, vendor compliance, OTIF, expedited shipments, and network visibility, we collaborate with customers to create transportation and warehousing solutions that solve specific logistical challenges.

An example is the grocery delivery service our last mile division created during the pandemic to support our grocery retail customers.

Leveraging our last mile delivery expertise, decades of grocery distribution experience, and unique MileZero technology, Capstone developed a white-labeled delivery solution that allows our customers to take advantage of a new sales channel with a more cost-efficient operating model.